Asian LNG prices rose to their highest level last week, spurred by colder weather in both Asia and Europe, plus the Russia/Ukraine situation intensifying.
The average price for Northeast Asian deliveries in January was $14.60 per MMBtu, industry sources said.
While the risk of Europe losing more Russian gas has consistently lifted the Dutch TTF benchmark, for the first time since the end of 2022, the spread remained narrow and could revert to an Asian JKM premium in the short term if Russian flows continue and the situation stabilises, said Florence Scmidt, energy strategist at Rabobank in London.
However, we could see TTF maintain its premium over JKM for a while, as Europe scrambles to import more LNG. “Either way, markets will be higher longer, “ she said.
In Japan, while the recent lower temperatures have led to higher gas prices, nuclear restarts could reduce the country’s reliance on gas fired power generation and thus ease LNG demand, according to a note from Rystad Energy.
S&P Global Commodity Insights assessed its daily Northwest Europe Marker benchmark for January cargoes delivered ex ship (DES) at $14.80 per MMBtu on 21st November, a $0.25 discount to TTF.
Meanwhile, Atlantic freight rates dropped to $15,500 on Friday, while Pacific basin rates fell to $23,000, according to Spark Commodities.
